JAPAN AIRLINES Co., Ltd. Financial Results 2 nd Quarter Mar/2017 (FY2016) October 31, 2016
Today s Topics P.1 P.2 P.5 P.6 P.8 P.21 From the first quarter of this fiscal year, figures for Revenue Passengers Carried, ASK, RPK and Load Factor include Marketing Carriers on codesharing flights operated by JAL. As a result, second-quarter ASK, RPK and Load Factor of the previous year reflect values after this change. 2016 年度選定
Overview of 1 st Half FY MAR/17 Results Operating Revenue Operating Profit (OP Margin) 700 650 687.9 36.0Bn ( 5.2%) 651.9 130 110 90 119.9 17.4% 27.5Bn ( 23.0%) 92.4 20% 15% 70 14.2% 600 1 st Half Mar/2016 1 st Half Mar/2017 50 1 st Half Mar/2016 1 st Half Mar/2017 10% Singapore Kerosene (USD/bbl) Dubai Crude Oil (USD/bbl) Fuel/FX Markets 1 st Half Mar/16 1 st Half Mar/17 y/y 69.5 53.1 23.7% 57.1 41.8 26.7% FX Rate (JPY/USD) 121.8 106.8 12.3% Operating profit declined 23.0% year-on-year to 92.4 billion yen due to a decrease in domestic passenger revenue caused by the Kumamoto earthquakes, rising maintenance costs and an increase in personnel costs for focused investments in human resources to strengthen the foundations of growth. The operating margin was 14.2%, which exceeds our operating margin target of at least 10%. 1
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Revised Consolidated Financial for FY Mar/17 Downward Revision in Operating Revenue and Profit The revision was made based on the results and Fuel/FX forecasts. Operating Profit Previous New Difference 220 200 201.0 31.0Bn (OP Margin) 20% Operating Revenue Operating Profit 1,343.0 1,280.0 63.0 201.0 170.0 31.0 180 160 140 120 15.0% 170.0 13.3% 15% Net Income (1) 192.0 161.0 31.0 Singapore Kerosene (USD/bbl) 1. Net Income Attributable to owners of the parent Results FY Mar/2016 60.0 for FY Mar/2017 54.5 (2 nd Half 56.0) Previous 50.0 100 Previous (Announced on APR 28) New 10% Dubai Crude Oil (USD/bbl) 47.2 FX Rate (JPY/USD) 120.5 42.9 (2 nd Half 44.0) 106.4 (2 nd Half 106.0) 36.0 123.0 Dividend The dividend estimated for Mar/2017 will be disclosed when our earnings forecast becomes clearer. 2
Revised Consolidated Financial for FY Mar/17 (Changes in Operating Profit) We revised operating profit down 31 billion yen, as international passenger demand and revenue per passenger and domestic revenue per passenger are seen to fall below our projections. Impact From Currency Market +20.0Bn Revenue 24.0Bn Cost +44.0Bn Fuel +22.0Bn Ex. Fuel +22.0Bn 37.0 31.0Bn ( 15.4%) 1 st Half SingaporeKerosene (USD/bbl) FX Rate (JPY/USD) Previous New Previous New 53.1 106.8 2 nd Half 50.0 56.0 123.0 106.0 Fullyear 54.5 106.4 201.0 7.0 +23.0 9.0 10.0 +9.0 170.0 FSC 7.0 FX 15.0 (TTL) 22.0 FSC 4.0 FX 5.0 (TTL) 9.0 FSC - FX 4.0 (TTL) 4.0 FSC:Fuel Surcharge FSC TTL 11.0 FX TTL 24.0 (TTL) 35.0 Previous Mar/2016 Full-Year Announced on April 28, 2016 Int l Domestic Other 国際旅客国内旅客 Cargo 貨物郵便 & Mail Other cost その他収入 Fuel 燃油費燃油費以外 Mar/2017 Passenger Passenger Revenue (Excl.Fuel) New Full-Year Revenue 63.0Bn - Effects on Operating Profit - Expenses +32.0Bn 3
Progress of measures to improve profitability Reinforce Divisional Profitability Management System and maximize profits Measures to increase revenue FY2016Q2 第 2 四半期 FY2016 下期 2 nd Half Int l Passenger Domestic Passenger Other Revenue Increase unscheduled flights Implement measures to boost demand Measures to increase revenue Balance demand and supply Incidental Business Increase travel sales turnover Increase flights on Honolulu and Bangkok routes Boost demand for Premium Economy Boost demand through Sakitoku, Dynamic Package Capture corporate demand through JAL SKY NEXT, capture inbound demand Flexible aircraft assignment according to demand Increase maintenance services, etc. Capture Fukko Discount program demand Measures to increase cost-effectiveness Sales promotion Maintenance Reduce mileage costs Review maintenance costs 第 FY2016Q2 2 四半期 FY2016 下期 2 nd Half Promote redemption of miles through award tickets Contain maintenance costs by improving quality Administration Reduce facility related costs Change repair scheduling, etc. General - Review entrusted service costs 4
Share repurchase Decision to acquire 30 billion yen of own shares by March 31, 2017 Content of share repurchase (1)Type of shares acquired Common shares of JAL (2)Total number of shares acquired 15 million shares (maximum) (3)Total price of shares acquired 30 billion yen (maximum) (4)Period of acquisition November 1, 2016 ~March 31, 2017 We plan to retire all acquired own shares. 300 200 100 0 Improve capital efficiency 247.0 223.0 Cash flow from operating activities Cash flow from investing activities Free Cash Flow(FCF) 24.0 Free Cash Flow(FCF) 24.0 Internal reserves 61.0 Improve returns to shareholders through flexible means Dividends 43.5 (Paid in June 2016) Reduce interest bearing debt 11.5 Share repurchase 30.0 5
Recent Topics International Domestic JAL, British Airways, Finnair and Iberia launch joint business between Japan and Europe. JAL started code-share with Alaska Airlines. JAL SKY SUITE configured international 777-200ER receives 2016 Good Design Award. Progressively introduced JAL SKY NEXT installed aircraft (seats, inflight Internet) on domestic routes (77 JAL SKY NEXT aircraft by 2016 fiscal year-end) Support tourism recovery and economic restoration throughout Kyushu Start second sales of Let s fly with JAL Kyushu Fukko Discount Stimulate inbound demand with Japan Explorer Pass domestic fares for international visitors Indices Other Selected in JPX Nikkei Index 400 Receives Japan Tourism Award, Award for Excellence in overseas category 2016 年度選定 6
Business Direction from FY2017 Medium and long term Management Targets from FY2017 ~To increase corporate value~ We will appropriately respond to passenger demand growth and continue to grow based on profitability and stability, and thus increase corporate value Profitability Stability Growth Pursue profitability, not merely business scale Review asset efficiency and capital efficiency Maintain shareholder s equity ratio at appropriate level to balance financial stability and capital efficiency Improve credit rating Capacity strategy with maintaining profitability Introduce fuel-efficient next generation aircraft Profit Margin* ROE* Shareholder s Equity Ratio* 60% Credit Ratings A Flat ASK on domestic flights* ASK on international flights* 10% A- A Minus *Specific target is to be announced around the end of FY2016. What to plan in Medium Term Management Plan* from FY2017 Build business operation structure to respond to expected slot increase at Tokyo metropolitan airports Consider and take action to medium and long term management issues Smoothly introduce next generation aircraft(787, A350, MRJ, etc.) 7
Consolidated Financial Results Consolidated Financial Results 1 st Half Mar/17 1 st H FY Mar/16 1 st H FY Mar/17 Diff. y/y ratio 2 nd Quarter (Jul-Sep) (5) Diff. y/y ratio Revenue 687.9 651.9 36.0 5.2% 354.7 21.1 5.6% Air Transportation Segment 620.2 585.6 34.5 5.6% 317.3 20.4 6.0% Operating Expense 567.9 559.4 8.4 1.5% 284.3 7.7 2.7% Air Transportation Segment 510.8 502.1 8.6 1.7% 253.3 7.2 2.8% Operating Profit 119.9 92.4 27.5 23.0% 70.3 13.3 16.0% Air Transportation Segment 109.4 83.5 25.8 23.7% 64.0 13.1 17.0% Operating Profit Margin(%) 17.4% 14.2% 3.3pt - 19.8% 2.4pt - Ordinary Income 122.6 89.8 32.8 26.8% 70.0 13.3 16.0% Net Income (1) 103.3 71.4 31.9 30.9% 56.6 14.1 19.9% ASK(MN seat km) 43,574 43,385 188 0.4% 21,951 113 0.5% RPK(MN passenger km) 32,583 32,560 22 0.1% 17,062 +28 +0.2% EBITDA Margin (%) (2) 23.8% 21.4% 2.4pt - 26.5% 1.6pt - EBITDAR Margin (%) (3) 25.5% 22.9% 2.6pt - 27.9% 1.8pt - Unit Cost(JPY) (4) 8.9 9.3 +0.4 +4.3% 9.3 +0.3 +3.4% Incl. Fuel 11.7 11.6 0.1 1.3% 11.5 0.3 2.3% 1. Net Income Attributable to owners of parent 2. EBITDA Margin = EBITDA / Revenue EBITDA=Operating Profit + Depreciation and Amortization 3. EBITDAR Margin = EBITDAR / Revenue EBITDAR=Operating Profit + Depreciation+ Aircraft Leases 4. Unit Cost = Air Transportation Segment Operating Cost (excluding fuel cost etc.) / ASK 5. The results for 2Q (July to September) are calculated by deducting the results of 1Q (April to June) from 1H (April to September) 8
Changes in Operating Profit 1 st Half FY Mar/17 Impact From Currency Market +11.1Bn Revenue 10.2Bn Cost +21.3Bn Fuel +10.7Bn Ex. Fuel +10.6Bn ASK y/y : 0.4% RPK y/y : 0.1% 27.5Bn ( 23.0%) Int l Passenger Domestic 22.5 Passenger Cargo & Mail Other 3.4 Revenue 9.6% 1.3% 9.8 0.2 Fuel +23.4 Maintenance Aircraft 2.4 0.7 Personnel 9.7% 1.5% 12.9 Other Cost +1.1 10.5% +0.4% 119.9 FSC 20.9 FX 6.8 (TTL) 27.7 FSC 3.7 FX 2.8 SALES 3.9 (TTL) 10.4 20.8% 0.2% +19.1% FSC - FX 0.6 (TTL) 0.6 Aircraft includes Aircraft Depreciation Aircraft Leases Aviation Insurance Premium Other cost includes Landing and navigation fees sales commission other 92.4 FSC:Fuel Surcharge Sales:Sales commission FSC TTL 24.6 FX TTL 10.2 (TTL) 34.8 Including a decline in both revenue and expenses as a result of offsetting international cargo sales commission with revenue from this fiscal year 1 st Half FY Mar/16 Revenue 36.0Bn - Effects on Operating Profit - Expenses +8.4Bn 1 st Half FY Mar/17 9
International Passenger Operations(Operating Results) International Passenger Passenger Revenue ASK (MN seat km) RPK (MN passenger km) 1 st H FY Mar/16 1 st H FY Mar/17 y/y ratio 2nd Quarter (Jul-Sep) (4) y/y ratio 235.6 213.1 9.6% 113.6 10.0% 25,307 25,500 +0.8% 12,810 +0.3% 20,377 20,405 +0.1% 10,475 0.2% Passenger Revenue was 213.1 billion yen, declined 22.5 billion yen y/y basis. ASK was up 0.8% y/y and RPK was up 0.1% y/y, resulting in L/F 80.0%, down 0.5pt. Passengers ( 000) 4,280 4,213 1.6% 2,161 0.9% L/F (%) 80.5% 80.0% 0.5pt 81.8% 0.4pt Factors of changes in Revenue per Passenger (estimate) Yield (JPY) (1) 11.6 10.4 9.7% 10.8 9.8% Unit Revenue (JPY) (2) 9.3 8.4 10.2% 8.9 10.2% Revenue per Passenger (JPY) (3) 55,055 50,589 8.1% 52,566 9.1% Fuel Surcharge 9% FX,etc. Net Unit Price +5% Total 8% 1. Yield = Passenger Revenue / RPK 2. Unit Revenue= Passenger Revenue / ASK 3. Revenue per Passenger = Passenger Revenue / Passengers 4. The results for 2Q (July to September) is calculated by deducting the results of 1Q (April to June) from 1H (April to September) 4% 10
International Passenger Operations(Change in Revenue) 1 St Half FY Mar/17 Although net revenue per 22.5Bn ( 9.6%) passenger increased through revenue management and the 235.6 expansion of JAL SKY SUITE operated routes, revenue per 19.4 3.1 213.1 passenger declined due to zero fuel surcharge from April and the stronger yen. Fuel Surcharge ( ) FX ( ) Net Unit Price (+) etc. Outbound demand down from a year before ( ) Robust inbound demand (+) Inbound demand was strong mainly on transpacific and Southeast Asia routes, but outbound demand slightly fell 1 st H FY Mar/16 Revenue per Passenger Number of Passengers 1 st H FY Mar/17 from the previous year 11
Domestic Passenger Operations (Operating Results) Domestic Passenger 1 st H FY Mar/16 1 st H FY Mar/17 y/y ratio 2nd Quarter (Jul-Sep) (4) y/y ratio Passenger Revenue 256.8 253.3 1.3% 143.9 2.0% ASK (MN seat km) 18,267 17,884 2.1% 9,141 1.6% RPK (MN passenger km) 12,205 12,154 0.4% 6,587 +0.7% Passengers ( 000) 16,082 16,130 +0.3% 8,665 +1.4% Passenger revenue was 253.3 billion yen, down 3.4 billion yen y/y. ASK was 2.1% y/y while RPK was 0.4% resulting in L/F 68.0%, up 1.1pt. L/F (%) 66.8% 68.0% +1.1pt 72.1% +1.7pt Yield (JPY) (1) 21.0 20.8 0.9% 21.9 2.7% Unit Revenue (JPY) (2) 14.1 14.2 +0.8% 15.7 0.4% Yield decreased by 0.9% y/y and revenue per passenger by 1.6% respectively. Revenue per Passenger (JPY) (3) 15,967 15,708 1.6% 16,612 3.4% 1. Yield = Passenger Revenue / RPK 2. Unit Revenue= Passenger Revenue / ASK 3. Revenue per Passenger = Passenger Revenue / Passengers 4. The results for 2Q (July to September) are calculated by deducting the results of 1Q (April to June) from 1H (April to September) 12
Domestic Passenger Operations (Change in Revenue) 1 st Half FY Mar/17 3.4Bn ( 1.3%) Revenue per passenger mainly of demand boosting fares decreased, due to price competition with other Price competition with other airlines( ) Holidays in September( ) airlines 256.8 Revenue per passenger decreased 4.2 +0.8 253.3 due to the way the days of Holidays in September fell on the calendar. Increase in individual passengers Increase in individual demand(+) Weaker tourism demand due to the Kumamoto Earthquakes( ) mainly with demand boosting fares Group passengers decreased due to the Kumamoto earthquakes 1 st H FY Mar/16 Revenue per Passenger Number of Passengers 1 st H FY Mar/17 13
Major Operating Expense Items Operating Expenses 1 st H FY Mar/16 1 st H FY Mar/17 Diff. y/y ratio 2 nd Quarter (Jul-Sep) (4) Diff. y/y ratio Fuel 122.5 99.0 23.4 19.1% 49.7 12.9 20.6% Landing and navigation fees 41.5 40.6 0.9 2.2% 20.6 0.5 2.4% Maintenance 25.2 27.6 +2.4 +9.7% 13.6 0.1 1.3% Sales commissions (Air Transport) (1) 12.4 7.8 4.6 37.1% 3.9 2.4 38.7% Aircraft (2) 49.0 49.8 +0.7 +1.5% 25.0 +0.4 +1.9% Services (3) 17.9 18.3 +0.4 +2.3% 9.4 +0.0 +0.2% Personnel 122.8 135.7 +12.9 +10.5% 68.1 +6.6 +10.7% Expenses of travel agency 43.0 42.2 0.7 1.8% 24.6 0.4 1.7% Other 133.2 138.0 +4.7 +3.6% 69.1 +1.6 +2.4% Fuel costs dropped due to the stronger yen and lower fuel prices, but rising personnel costs led to operating expenses of 559.4 billion yen, down 8.4 billion yen from the previous year. Fuel costs fell 23.4 billion yen due to lower fuel prices and stronger yen (including a 10.7 billion yen decrease owing to the stronger yen) Personnel costs rose 12.9 billion yen as a result of priority investments in human resources to strengthen the foundation for growth Total Operating Expenses 567.9 559.4 8.4 1.5% 284.3 7.7 2.7% 1. From FY Mar/17, sales commissions for International Cargo are to be offset by its revenues. 2. Aircraft= Aircraft Depreciation+ Aircraft Leases+ Aviation Insurance Premium, etc. 3. Services= Expenses regarding inflight services, airport lounges, cargo equipment, etc. ASK y/y: 0.4% 4. The results for 2Q (July to September) are calculated by deducting the results of 1Q (April to June) from 1H (April to September) Maintenance costs rose 2.4 billion yen for engine maintenance, and such. 14
Impact of Fuel and FX Markets Transition of Fuel Cost by Factors Hedging Ratio of Fuel Costs (As of End of 1 st Half FY Mar/17) 140 120 100 80 60 122.5 1 st H FY2015 Market 20.4 23.4Bn ( 19.1%) Volume increase/ FX Hedging 10.7 +7.7 99.0 1 st H FY2016 100% 80% 60% 40% 20% 0% FUEL FX Approx. Approx. 50% 40% Approx. Approx. 20% 20% Approx. Approx. 5% 5% Mar/2017 Mar/2018 Mar/2019 Fuel / FX Markets Sensitivity for Fuel Costs Singapore Kerosene (USD/bbl) Dubai Crude Oil (USD/bbl) FY Mar/17 Plan 1 st H FY Mar/16 1 st H FY Mar/17 y/y ratio 50.0 69.5 53.1 23.7% 36.0 57.1 41.8 26.7% New 54.5 (2 nd Half 56.0) 42.9 (2 nd Half 44.0) (Without Hedging) Mar/2017 Crude Oil (Change in 1 USD/bbl) FX (Change in 1 JPY/USD) 2.4 JPY Bn Per Year 1.2 JPY Bn Per Year FX Rate (JPY/USD) 123.0 121.8 106.8 12.3% 106.4 (2 nd Half 106.0) 15
Major Balance Sheet Items Consolidated Balance Sheet Summary as of End of 1 st Half FY2016 End of FY2015 2016/3/31 End of 1H FY2016 2016/9/30 Diff. Total Assets 1,578.9 1,581.0 +2.1 Cash and Deposits (1) 420.3 369.4 50.8 Balance of Interest-bearing Debt (2) 92.6 74.0 18.6 Future Rental Expenses under Operating Leases 96.9 83.4 13.4 Shareholders Equity 843.0 884.9 +41.8 Shareholders Equity Ratio (%) 53.4% 56.0% +2.6pt D/E Ratio(x) (3) 0.1x 0.1x 0.0x The balance of interestbearing debt decreased by 18.6 billion yen to 74.0 billion yen as a result of repayment. Shareholders Equity Ratio was 56.0%. (Reference) As of End of 1 st Half FY2016 D/E ratio including Future Rental Expenses under Operating Leases: 0.2x 1. Certificate of deposits included 2. Accounts Payable-installment Purchase included 3. D/E ratio = On-balance sheet Interest-bearing Debt / Shareholders' Equity 16
Major Cash Flow Items 1 st H FY Mar/16 1 st H FY Mar/17 Diff. Net income before income taxes and minority interests 123.6 89.2 34.3 Depreciation and Amortization 43.4 46.9 +3.5 Other 10.6 3.7 14.4 Cash Flow from Operating Activities 177.7 132.4 45.2 Capital Expenditure (1) 97.3 127.9 30.5 Other 0.5 9.8 +10.4 Cash Flow from Investing Activities (2) 97.8 118.0 20.1 Free Cash Flow (3) 79.8 14.4 65.3 Repayment of Interest-bearing Debt (4) 17.7 21.1 3.4 Cash dividend, and Other 40.6 43.2 2.6 Cash Flow from Financing Activities 58.3 64.3 6.0 Total Cash Flow (5) 21.4 49.9 71.4 EBITDA 163.3 139.4 23.9 EBITDAR 175.6 149.5 26.0 1. Expenditures due to purchases of fixed assets 2. Exclude deposits and withdrawals from deposit accounts 3. Cash Flow from Operating Activities + Cash Flow from Investing Activities 4. Repayment of Loans + Repayment of Lease Debt 5. Cash flow from Operating Activities + Cash Flow from Investing Activities + Cash Flow from Financing Activities 17
FY2016 Earnings (Consolidated) Consolidated Financial Results Mar/2016 Results Mar/2017 Previous Announced on April 28, 2016 Diff. Revenue 1,336.6 1,280.0 1,343.0 63.0 Int l Passenger 448.7 413.0 450.0 37.0 Dom. Passenger 501.2 496.0 503.0 7.0 Cargo and Mail 91.5 76.0 85.0 9.0 Other 295.0 295.0 305.0 10.0 Expenses 1,127.4 1,110.0 1,142.0 32.0 FUEL 228.1 193.0 202.0 9.0 Other Costs 899.3 917.0 940.0 23.0 Operating Profit 209.1 170.0 201.0 31.0 Operating Profit Margin(%) 15.7% 13.3% 15.0% 1.7pt Ordinary Income 209.2 163.0 193.0 30.0 Net Income (1) 174.4 161.0 (3) 192.0 (3) 31.0 Unit Cost (JPY) (2)(4) 9.1 9.3 9.5 0.2 Operational Preconditions Mar/2017 Previous Announced on April 28, 2016 (4) ASK* Int l +0.4% 0.1% Doms 0.7% 0.0% TOTAL 0.0% 0.1% RPK* Int l +0.9% +1.7% Singapore Kerosene (USD/bbl) Dubai Crude Oil (USD/bbl) Doms +0.3% 0.6% TOTAL +0.7% +0.8% 54.5 50.0 42.9 36.0 FX(JPY/USD) 106.4 123.0 * y/y 1. Net income attributable to owners of the parent 2. Unit Cost = Air Transportation Segment Operating Cost (excluding fuel costs) / ASK 3. Due to application of new tax effect accounting guideline, we expect to report about 30.0 billion yen of income tax deferred at the end of Mar/2017. However, income tax deferred to be deducted from the calculation of dividend. 4. From the first quarter, ASK and RPK include JAL operated code-share flights marketed by other airlines in calculations. Therefore, the figures of the result of the previous year and the previous forecast are adjusted. 18
Mar/2017 Earnings (Consolidated Balance Sheet) To improve financial stability, we aim to maintain the equity ratio at around 60% to improve our credit rating. Balance Sheet Fundamental Capital Policy End of Mar/2016 Results End of Mar/2017 Previous Announced on April 28, 2016 Diff. Total Assets 1,578.9 1,679.0 1,761.0 82.0 Balance of Interestbearing 92.6 83.0 88.0 5.0 debts Shareholders Equity 843.0 972.0 1,035.0 63.0 Shareholders Equity 53.4% 57.9% (3) 58.8% (3) 0.9pt Ratio(%) ROE (1) 21.5% 17.7% 20.4% 2.7pt ROA (2) 13.7% 10.4% 12.0% 1.6pt Safety Increase financing capability Capital efficiency Return to shareholders Accumulate retained earnings to prepare against risks Maintain shareholders equity ratio at a safer level. Improve credit rating. To aim for single A flat (4) Achieve capital efficiency exceeding cost of shareholders equity. Maintain ROE at 10% or above Consider increasing return to shareholders on building a solid financial foundation 1. (Net profit attributable to owners of the parent)/(average of shareholder s equity at beginning and end of fiscal year) 2. (Operating profit ) / (average of total assets at beginning and end of fiscal year) 3. Due to application of new tax effect accounting guideline, we expect to report about 30.0 billion yen of income tax deferred at the end of Mar/2017. 4. Credit rating by Rating and Investment Information, Inc., Japan Credit Rating Agency, Ltd. 19
Mar/2017 Earnings (Cash Flow) Cash Flow Make relevant capital investments based on strict investment discipline. Secure return on investment and maximize Free Cash Flow Mar/2016 Results Mar/2017 Previous Announced on April 28, 2016 Cash Flow from Operating Activities 312.3 247.0 268.0 21.0 Cash Flow from Investing Activities 1 207.2 223.0 243.0 +20.0 Free Cash Flow 1 105.1 24.0 25.0 1.0 Cash Flow from Financing Activities 49.6 85.0 50.0 35.0 EBITDA 297.7 267.0 298.0 31.0 EBITDAR 321.1 287.0 318.0 31.0 Diff. Use of cash flows(mar/2017 ) 1. Exclude deposits and withdrawals from deposit accounts 300 200 100 0 247.0 223.0 Cash flow from investing activities Cash flow from operating activities Free Cash Flow(FCF) 24.0 Free Cash Flow(FCF) 24.0 Internal reserves 61.0 Dividends 43.5 (Paid in June 2016) Reduce interest bearing debt 11.5 Share repurchase 30.0 20
Fly into tomorrow. Finance & Investor Relations, Japan Airlines
Supplemental Reference Revenue of International Routes by Geographic Segment (%) 1 st Half y/y 2 nd Quarter y/y America 1.8% 2.7% Europe 12.0% 12.1% Asia/Oceania 12.8% 14.3% China 21.1% 18.7% Hawaii/Guam 2.8% 4.2% Total 9.6% 10.0% (MN seat km) Passenger Revenue ASK FY Mar/16 1 st Half Proportion of whole Int l FY Mar/17 1 st Half 1 st Half 2 nd Quarter FY Mar/16 FY Mar/17 y/y FY Mar/17 y/y America 6,522 7,161 +9.8% 3,617 +10.0% Europe 4,044 3,879 4.1% 1,978 3.1% Asia/Oceania 9,012 8,921 1.0% 4,454 1.2% China 1,656 1,763 +6.4% 899 +7.4% Hawaii/Guam 4,071 3,775 7.3% 1,862 11.3% Total 25,307 25,500 +0.8% 12,810 +0.3% 2 nd Quarter 25% 27% 27% 16% 16% 16% 33% 32% 30% 12% 10% 10% 14% 15% 17% 100% 100% 100% ( 000) - From the first quarter of this fiscal year, figures for Revenue Passengers Carried, ASK, RPK and Load Factor include Marketing Carriers on code-sharing flights operated by JAL. The yearearlier second quarter also shows the figures after reflecting this change. - Route categories have been changed as below. Trans Pacific routes of the previous year have been changed to America routes after removing Hawaii routes. Asia/Oceania routes have removed Guam routes. Hawaii and Guam routes above have been combined as Hawaii/Guam routes. Passengers 1 st Half 2 nd Quarter FY Mar/16 FY Mar/17 y/y FY Mar/17 y/y America 558 607 +8.9% 315 +10.1% Europe 344 337 2.0% 178 4.1% Asia/Oceania 2,087 1,994 4.5% 996 4.9% China 694 716 +3.1% 387 +11.2% Hawaii/Guam 595 557 6.4% 283 9.4% Total 4,280 4,213 1.6% 2,161 0.9% RPK 1 st Half 2 nd Quarter (MN passenger km) FY Mar/16 FY Mar/17 y/y FY Mar/17 y/y America 5,270 5,770 +9.5% 2,994 +10.7% Europe 3,122 3,054 2.2% 1,605 4.4% Asia/Oceania 7,212 7,038 2.4% 3,531 2.7% China 1,308 1,334 +2.0% 720 +9.5% Hawaii/Guam 3,463 3,206 7.4% 1,623 10.8% Total 20,377 20,405 +0.1% 10,475 0.2% Load Factor 1 (%) st Half 2 nd Quarter FY Mar/16 FY Mar/17 Diff. FY Mar/17 Diff. America 80.8% 80.6% 0.2pt 82.8% +0.5pt Europe 77.2% 78.7% +1.5pt 81.1% 1.1pt Asia/Oceania 80.0% 78.9% 1.1pt 79.3% 1.2pt China 79.0% 75.7% 3.3pt 80.1% +1.5pt Hawaii/Guam 85.1% 84.9% 0.1pt 87.2% +0.4pt Total 80.5% 80.0% 0.5pt 81.8% 0.4pt 21
Supplemental Reference Number of Aircraft End of Mar/2016 End of September/2016 Diff. Owned Leased Total Owned Leased Total Boeing 777-200 12 0 12 12 0 12 - Boeing 777-200ER 11 0 11 11 0 11 - Boeing 777-300 4 0 4 4 0 4 - Boeing 777-300ER 13 0 13 13 0 13 - Large-sized Total 40 0 40 40 0 40 - Boeing 787-8 23 0 23 25 0 25 +2 Boeing 787-9 3 0 3 5 0 5 +2 Boeing 767-300 9 0 9 7 0 7 2 Boeing 767-300ER 28 4 32 29 3 32 - Middle-sized Total 63 4 67 66 3 69 +2 Boeing 737-400 12 0 12 11 0 11 1 Boeing 737-800 22 29 51 23 29 52 +1 Small-sized Total 34 29 63 34 29 63 - Embraer 170 17 0 17 17 0 17 - Embraer 190 0 0 0 3 0 3 +3 Bombardier CRJ200 9 0 9 8 0 8 1 Bombardier D8-400 8 2 10 7 2 9 1 Bombardier D8-400CC 2 0 2 2 0 2 - SAAB340B 13 0 13 12 0 12 1 Bombardier D8-300 1 0 1 1 0 1 - Bombardier D8-100 4 0 4 3 0 3 1 Regional Total 54 2 56 53 2 55 1 TOTAL 191 35 226 193 34 227 +1 22
Supplemental Reference Earnings Mar/2017( Air transportation Segment ) International Passenger Operations Mar/2016 Results Mar/2017 Full-year () y/y (%) 1H (Result) 2H () Passenger Revenue ASK (MN seat km) RPK (MN passenger km) 448.7 413.0 7.9% 9.6% 6.0% 50,563 50,788 +0.4% +0.8% +0.1% 40,305 40,660 +0.9% +0.1% +1.6% Passengers ( 000) 8,460 8,385 0.9% 1.6% 0.2% L/F (%) 79.7% 80.1% 80.1% 80.0% 80.1% Yield (1) (JPY) 11.1 10.2 8.7% 9.7% 7.5% Unit Revenue (2) (JPY) 8.9 8.1 8.3% 10.2% 6.2% Revenue per Passenger (3)(JPY) 53,047 49,299 7.1% 8.1% 5.9% 1. Yield = Passenger Revenue / RPK 2. Unit Revenue=Passenger Revenue / ASK 3. Revenue per Passenger = Passenger Revenue / Passengers From the first quarter of this fiscal year, figures for Revenue Passengers Carried, ASK, RPK and Load Factor include Marketing Carriers on code-sharing flights operated by JAL. Mar/2016 results also shows the figures after reflecting this change. 23
Supplemental Reference Earnings Mar/2017( Air transportation Segment ) Domestic Passenger Operations Mar/2016 Results Mar/2017 Full-year () y/y (%) 1H (Result) 2H () Passenger Revenue ASK (MN seat km) RPK (MN passenger km) 501.2 496.0 1.0% 1.3% 0.7% 35,869 35,628 0.7% 2.1% +0.8% 24,341 24,408 +0.3% 0.4% +1.0% Passengers ( 000) 32,114 32,301 +0.6% +0.3% +0.9% L/F (%) 67.9% 68.5% 68.5% 68.0% 69.1% Yield (1) (JPY) 20.6 20.3 1.3% 0.9% 1.6% Unit Revenue (2) (JPY) 14.0 13.9 0.3% +0.8% 1.5% Revenue per Passenger (3)(JPY) 15,609 15,362 1.6% 1.6% 1.5% 1. Yield = Passenger Revenue / RPK 2. Unit Revenue=Passenger Revenue / ASK 3. Revenue per Passenger = Passenger Revenue / Passengers 24
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